Encountered a profit problem?
Editor’s note: This article is from Securities Daily, reporter: Wang Lixin.
In the first centralized land auction held in Beijing a few days ago, Shenzhen Joyo Real Estate Group Co., Ltd. (hereinafter referred to as “Joyo”) won four plots with 18.7 billion yuan (full-caliber statistics) and became the biggest winner. An industry insider revealed to a reporter from the Securities Daily that today (the day of the auction), a certain executive WeChat of Zhuoyue was “exploded” by “friends”.
Within less than a day, rumors that Zhuoyue might withdraw from certain plots in Beijing were circulating in the industry. The reason was that the land price was miscalculated and the collaborators were dissatisfied. On the same day, a person from the excellent aspect responded to the “Securities Daily” reporter, “There is no case of retreat, and there is no saying that there is a’measurement error’.”
“Excellence is very fierce in acquiring land in the land market this year. Since the star professional manager Chen Kai joined Joyous in November 2020, the industry has reported its three-year strategic plan to advance to the top 20, whether it is enterprising. , Or ambition, this is obviously not an easy goal.” Some insiders bluntly stated to the “Securities Daily” reporter that Excellence had not been listed on the Hong Kong Stock Exchange twice in 2007 and 2009, and this year’s high-profile “conquest” land. Behind the market is not only chasing the “hundred billion dream”, but perhaps also preparing for the IPO.
Having a profit problem?
Refused to retreat, and the attitude of excellence is very clear. After all, 20% of the deposit was paid, and according to reports, Joyo’s equity purchase of land exceeded 11.3 billion yuan. If the land is retired, the penalty will not be small.
“Some of the land acquired this time were acquired by the company independently, but most of the land acquired by the consortium. According to the agreement, the equity, obligation, line, share ratio, etc. are normally promoted, so the amount of land acquired by equity has not yet been Confirmation.” The above-mentioned outstanding person told the “Securities Daily” reporter that the joint land acquisition project will be advanced in accordance with the joint land acquisition agreement. Excellence has many partners in Beijing and is also discussing more cooperation projects at the same time.
“The details of the cooperation between Excellence and partner companies are being negotiated.” A source bluntly told the Securities Daily reporter that considering the many restrictions on land acquisitions and the extremely limited space for profitability, this may be a big gamble for Excellence to go north. The greatest pressure on the Beijing market is also the cause of the “anxiety” of its partners.
Take the 3005-02 plot of Xiaodian Village, Jinzhan Township, Chaoyang District, which was acquired by Joyo in the first auction on May 10, as an example. The final land price was 3.927 billion yuan + 13% of government property rights, and the floor was sold. The price is 52,988 yuan/square meter, and the premium rate is 3.89%. However, the upper limit of the sale price of the house on this plot is 76,000 yuan/square meter, and the actual book value is not very good after including the government’s share of property rights.
According to estimates by industry insiders, the Zhongguancun Life Science Park plot and Dongxiaokou plot in Changping District, which were successively won by Excellent Consortium, will have the upper limit of the future price of plots.At 63,000 yuan per square meter, preliminary estimates have been completed after the auction. The floor price of the land is as high as 53,200 yuan per square meter. Although the government will subsidize public rental housing, there is currently no room for 10,000 yuan. Space is extremely limited. Therefore, the industry has heard outstanding “miscalculation” voices.
The company did not directly respond to how many restrictions on the land parcels affect profits. “Through the selection and judgment of the land, the selection and deepening of Beijing’s enterprises to jointly acquire the land, which is in line with our consistent strategy in terms of safety, risk resistance and management flexibility.” Excellent relevant person told the “Securities Daily” “The reporter responded that for each piece of land that participated in the auction, the company made a decision after fully investigating and judging the functions of the city company and group including investment, production strategy, and marketing, and after several rounds of full exchanges with partners.
Responded that there is no IPO plan for the time being
Excellent “radicalism” is not only reflected in the Beijing land market. According to the “Securities Daily” reporter statistics, as of now, Joyo has acquired 18 plots of land in the open market during the year, covering the Yangtze River Delta, Midwestern China, Southern China and Eastern China.
On January 20, Joyo won a mixed-use commercial and residential land in Chongqing for 1.21 billion yuan. The floor price reached 14,236 yuan per square meter, and the premium rate was 36.88%, making it the new land king in Chongqing. On January 21st, Joyo acquired the land in Guangzhou. The floor price reached 27,105 yuan/square meter, with a premium rate of 45%. The floor price was slightly lower than the Huangpu “Land King” 27274 created by China Metallurgical Science and Industry in August 2016. Yuan/square meter.
“For a real estate company that wants to scale up, it is not enough to deploy in Guangdong, Hong Kong, Macao and the Yangtze River Delta.” Xiao Yunxiang, a senior analyst at Tongce Research Institute, told a reporter from Securities Daily, but the company needs to make market judgments , Concentrate funds in strategic investment areas, and achieve better fund raising and deployment for replenishment and new demand.
“Excellence has strict funding arrangements and overall planning for land bank. In terms of urban layout, it has been strictly selected, not spreading the pie. At present, Joyo has entered 40 cities. The group’s investment support and quota will be in accordance with the company cycle in different cities. Receivables are linked to the completion rate of sales.” Relevant persons in Excellence told the “Securities Daily” reporter that the main purpose is to ensure that sales revenue and expenditure are within the margin of safety. Excellence insists on “bloodmaking” through operation and management, and the interest generated by financing depends on operation. To solve the problem of sexual collection, the investment is promoted through operating leverage rather than debt.
There are two voices in the industry regarding Joyo’s large-scale investment in the country. One is concerned about the safety of its capital chain; the other is that Joyo is preparing for listing.
In terms of capital, a person from Joyo said, “The sales amount of Joyo’s equity in 2020 will be 70 billion yuan, operating cash flow will be more than 35 billion yuan, book cash is abundant, and it is currently a green housing company.” Regarding the listing plan , The person said, as of the end of 2020, outstanding financing interest rates are synchronizedIt has dropped by 150BP and has no plans to go public.
“Under the new regulations such as the’three red lines’, lending’two red lines’, and land auctions’two centralizations’, the logic of the real estate market has undergone fundamental changes, and many small and medium-sized real estate companies fall into the trap In this situation, I don’t want to be eliminated, only to continue to maintain the momentum of development. In addition, the sales scale and performance that are plausible will become the material for the outstanding listing of “telling a good story.” Xiao Yunxiang said.